It all depends on the target audience of the start-up.
Macau Business | March 2022 | Special report | GBA 5 years young
In effect since last February, the Qualified Foreign Limited Partnership (QFLP) pilot program enables foreign investors to establish funds in the Macao-Hengqin area and raise funds from domestic and foreign investors, according to the joint management committee. from Macau and Hengqin.
“The new program represents an important step to support the development of Macau’s financial services sector,” said a statement from the Committee.
The QFLP program wants to diversify Macau from a casino hub to a financial hub. Therefore, there will be no capital requirements or foreign ownership restrictions, and the funds created under the QFLP program will allow foreign investors to buy shares in start-ups and other unlisted companies and to participate in private placements by listed companies and private equity and venture capital products, the statement added.
(First introduced in Shanghai in 2010, the QFLP has since expanded to other cities like Shenzhen and Qianhai. The Macau-Hengqin area will be the 11th locality to introduce the program.)
The QFLP program could be the boost that was missing in the development of the local start-up ecosystem.
As Marco D. Rizzolio explains to Macau Business, “The start-up ecosystem in the Greater Bay Area (GBA) is much more developed than it is in Macau. Some of the stakeholders in Macau are still working in silos [note: in a kind of bubble]and connections need to be more dynamic and interconnected.
The founder and director of Follow Me Macau (a local company providing an online e-commerce platform since 2015) went further: “Macau is in its infancy and needs an extra push from the government side but also of all the stakeholders of the ecosystem. Integration with the GBA will be beneficial for local start-ups. Macau needs more connections and more networks within the GBA ecosystem.
“It takes 10 to 20 years to develop a start-up ecosystem, and Macao just started in 2017. There is still a long way to go, but the foundations are there,” says Rizzolio.
He adds however: “I must say that the entrepreneurs (permanent residents) of Macau now have the conditions to operate from Macau before settling permanently in China. The Macau government has created a start-up incubator that makes it easier for entrepreneurs to set up businesses in China. The incubator, under the aegis of the Macau Economic Bureau and managed by ‘Parafuturo’ has developed numerous agreements with other GBA incubators, facilitating the creation of a company in China and the search for a space. Other private incubators have also developed partnerships within the GBA.
Why go to the GBA?
The first answer is: “It all depends on the entrepreneur’s target market (geography, country, sector) and the customer to whom he is trying to sell his products and services. Entrepreneurs have this very clearly in mind, since they have had to build a business plan and spend hundreds of hours researching and studying the market.
So, “if your business is focused on mainland Chinese customers, it makes sense to cross the border and locate your startup there.”
Marco D. Rizzolio knows that “Hengqin is still at a very early stage, although they have space and office space (such as the recently established Innovalley, TCM Science Park, and New Technology Transfer Incubator).” But, he adds, “it needs momentum, and in a few years, Hengqin will become an innovation hub conducive to the development of more businesses.”
As the entrepreneur says Macau Business“Other GBA cities were very dynamic and innovative even before the GBA concept was created (Hong Kong, Shenzhen, Dongguan, Guangzhou, etc.).”
Outside of Macao, “rents are much cheaper and you have many incubators across the border.” More than space, “the human resources factor is very important,” says Rizzolio, pointing to Macau’s small local population, its full employment rate and one of the highest GDP per capita in the world. And it’s a city where the gaming sector attracts most talent. “In China, you have a lot of talent and at a cheaper price,” he concludes.
“Space is relatively cheap in Zhuhai; you will find various sizes of offices for 1,000 to 10,000 RMB, large enough for a team to work in. However, hiring talent isn’t as easy or cheap as you might think,” confirms Peter Chang, co-founder of Golding Technology Co, a company that provides image, space, and high-quality data processing since 2019.
Chang, who is also the director of Next page (a media side project of the Macau Startup Club dedicated to publishing business information), understands that “every big company, like Ali and Tencent, as well as small companies, are hungry for talent, which means that the cost is not is no cheaper than it is in Macau.
On the other hand, “administrative costs are high to run a business in China, including tax and social security fund payments.”
Therefore, Peter Chang tells Macau Business“a large number (99%) of the start-ups we know of – typically in the digital marketing, software development, graphic design and e-commerce sectors in the Macau region – do not really benefit from the policy GBA.”
Conduct studies on ACS
The Guangdong-Hong Kong-Macao Greater Bay Area Studies (GBAS) Center of the Faculty of Social Sciences of the University of Macao is currently working on a study titled Big Data and Innovation in Public Administration: Promoting Cooperation and Innovation in Public Administration in the Guangdong-Hong Kong-Macao Greater Bay Area.
Under the leadership of Professor Richard Weixing Hu, GBAS has participated in, and in some cases even organized, relevant initiatives.
This is the case of the Conference on the collaboration between the Greater Bay Area and Shanghai and Macao, organized jointly with the Shanghai Institutes of International Studies, and the Conference on the Development of the Bay Areas in the World with the Guangdong-Hong Kong-Macao Institute of Development Studies at Sun Yat-sen University and the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute at Lingnan University.
Another example: the Guangdong-Macao Intensive Cooperation Zone Development Seminar in Hengqin, where participants discussed the master plan from different angles, sharing their interpretations of the document and offering suggestions for the development of the cooperation zone. .
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